Precisely what is it that had gotten the 34-year Senate veteran and ex-Presidential candidate so indignant?

The failure of the Bush administration’s post-war policy in Iraq? No.

The state-sponsored holocaust cartoon exhibit now on display in a country (Iran) whose leader maintains the holocaust is a “myth”? No.

Child pornography, perhaps? No, sadly.

Not even the price of gasoline was on the Senator-who-would-be President’s mind.

What was on the Senator’s mind—what had him really steaming—was Wal-Mart.

Returning to Des Moines (the scene of his infamous “I started thinking as I was coming over here…” speech in which he went on to plagiarize the speech of a British politician; a speech which existed, unfortunately for Joe and his soon-to-be-abandoned Presidential campaign, on a video handily provided to the media by the Dukakis campaign) Biden took to a podium and ranted for a reported 15 minutes against one of the greatest economic success stories in American history:

Biden summed up his problem with the largest non-government employer in the nation as follows, and I am not making this up:

“My problem with Wal-Mart is that I don't see any indication that they care about the fate of middle-class people. They talk about paying them $10 an hour. That's true. How can you live a middle-class life on that?”

Now, I don’t know where in the Constitution it is written that retailers must provide a “middle-class” life for their employees. I don’t imagine the woman who vacuums Biden’s nice Senate office every night is being paid a “middle-class” wage. Nor, I would bet, is the guy who starched Biden’s nice, striped, this-will-look-good-on-camera shirt at the dry cleaners getting a “middle-class” wage.

But that vacuum lady and that dry-cleaning guy don’t concern Biden precisely because they are not employed by a company that has thus far been unsuccessfully targeted for organizing by Big Labor.

Personally, I couldn’t care less if Wal-Mart employees decide to unionize or don’t decide to unionize. Having met Sam Walton and toured any number of Wal-Mart stores with senior Wal-Mart managers and junior Wal-Mart managers and just plain Wal-Mart associates made rich through "Mister Sam's" generous stock grants over the years, I have a hard time believing people with that kind of strong, proud culture will throw in its lot with the work-rules crowd. But anything is possible.

I just think when a guy who’s claim to fame is that he’s been in the U.S. Senate for 34 years decides to pick on the most successful retailer ever created, it bears some looking into.

For starters, Biden is being cute when he says the folks at Wal-Mart “talk about” paying $10 an hour. They don’t talk about it—Wal-Mart actually does pay ten bucks an hour.

And ten bucks an hour is, for the record, double the minimum wage.

Second, Wal-Mart did not exactly act like the British Navy when it came to hiring the 1.8 million individuals who now work there worldwide. (The Brits, in the early decades of their naval history, used press gangs to “recruit” seamen for their ships by, among other techniques, getting poor sods unconscious-drunk onshore and carrying them offshore before they came to.)

In fact, a recently opened Wal-Mart superstore in one of the most anti-Wal-Mart locations—Northern California—had 11,000 applicants seeking 400 of those lousy, non-middle-class-enabling $10-an-hour jobs that Senator Joe finds so problematic.

Here’s the story:Wal-Mart has accepted more than 11,000 applications from Bay Area job seekers, marking the largest volume of interest it has received at any of its Northern California stores, said Wal-Mart spokeswoman Cynthia Lin.

“I needed a job ASAP, and they had their doors open,” said Virginia Ford, 19, of Oakland, who had applied for 25 jobs in three months before she landed one as a cashier at Wal-Mart in Oakland on Tuesday.

—San Francisco Chronicle, August 2005

Doesn’t sound like Ms. Ford was kidnapped and forced to work at gunpoint: sounds like she just wanted a job; and Wal-Mart provided it, as Wal-Mart has provided 1.799999 million other jobs around the world.

Now, for comparison's sake, let’s look at Joe Biden’s record on creating middle-class jobs, since he's the one complaining about it.This is what his web site says on the topic:

Recognizing that America's 25 million small businesses employ nearly half of the private work force, generate more than half of the nation's gross domestic product, and are the principal source of new jobs in the U.S. economy, Sen. Biden helped secure an upgrade of Delaware's Small Business Administration branch office to full district office status. Prior to this announcement, Delaware was the only state in the nation without a district office.

So, there you have it: what Joe Biden did to create jobs was he got the Feds to shell out for an SBA “district office,” the web site of which lists five individuals.

Thus by my math one could say Senator Joe has, in his 34 year career, created five jobs that might not otherwise have been created if he had not spent those 34 years in the U.S. Senate.

By comparison, when Joe Biden was sworn in back in 1973, Wal-Mart had just over 3,500 “associates”—the term Sam Walton used for “employees”—and generated $167 million in sales. (If you get a chance, look up one of the old annual reports on the Wal-Mart web site: they are straightforward, earnest and touchingly old-timey.)

Today, Wal-Mart employs 1.3 million associates in the U.S.—and another 500,000 outside the U.S.—which together amount to a very large a number of people who’ve willingly accepted one of those non-middle-class-enabling jobs. For the record, Wal-Mart's U.S. job growth compounds at an astonishing 19% over the 34 years that Fighting Joe Biden has been on Capital Hill.

A little back-of-the-envelope math makes the numbers even larger: assuming turnover (people who leave) at Wal-Mart runs about one-third of total employment each year (and that’s a guess: most low-end retailers run far higher than that) then Wal-Mart has employed, over the last 34 years, an additional 2.5 million Americans on top of the 1.3 million currently working in dead-end, unattractive, non-middle-class jobs at what is now double the minimum wage.

So that means as many as 3.8 million Americans have found employment thanks to Sam Walton’s low-cost retailing model—compared to the five bureaucrats wangled out of the U.S. budget by Fighting Joe Biden.

Clearly Wal-Mart knows a thing or too more about creating jobs than the Senator running for President.But is $10 an hour a “livable wage,” as Biden and the other Democrats-who-think-they-can-become-President-but-don’t-realize-Hillary-already-has-the-nomination-locked-up clique would argue it is not?

For many Americans, including the reporters—and I count two of them as friends—who despise Wal-Mart, it is not. But for many Americans, it clearly is—otherwise, nobody would work for Wal-Mart.

They’d go to 7-11 or McDonalds or Circle K, or somebody offering a job at minimum wage. But they don’t. Almost 4 million of them—by my calculations—have gone to Wal-Mart for work.

And I haven’t even gotten to the economic benefit accruing to the 100 million Americans who shop at Wal-Mart each week in the form of lower prices than they would otherwise pay if Sam Walton hadn’t revolutionized discount retailing.

Assuming consumers save ten bucks each visit over the pre-Walton era of every-day-low-pricing, that amounts to a $1 billion-a-week benefit to American consumers, or $52 billion a year. Not bad.How much has Joe Biden or any of his anti-Wal-Mart peers done for the average American? Let’s look at Joe's own self-promoting web site for clues.Here’s Senator Joe fighting drugs:

As Co-Chairman of the International Narcotics Control Caucus, Sen. Biden has a long record of accomplishment in passing bills to combat drug use and help drug addicts kick their habit. He wrote the 1988 law creating the nation’s “Drug Czar,” who oversees and coordinates national drug control policy. Today, Senator Biden continues to work to stop the spread of new drugs such as Ecstacy, Rohypnol, and Methamphetamines.

Given the current meth epidemic sweeping the American middle-class, I’d say not much has changed since Joe “wrote the law” creating a “Drug Czar.” As for the environment…

Sen. Biden believes we should strengthen the Clean Air Act to cut cancer-causing emissions. He also helped lead the effort to make polluters pay for the clean up of toxic waste sites. When polluters don't pay, taxpayers do. That's why Sen. Biden wants to restore the Superfund Trust Fund and force corporations to take responsibility for their actions.“When polluters don’t pay, taxpayers do.” Tough talk from Delaware’s Senior Senator! However, I see no record of how Joe has ever applied that tough talk to two of the largest employers in his state, DaimlerChrysler and General Motors, whose main product happens to pollute the atmosphere.

Perhaps it’s because he’s been spending so much effort “fighting for”—to use a favorite phrase of the Senator Forehead-types of all parties and persuasions—education. Here’s what his web site says about that:

Investing in education is one of Sen. Biden's top priorities. To better prepare today's students to meet the technology challenges of tomorrow, he has undertaken bold initiatives in the Senate to close the "digital divide" and ensure that all students have access to the on-ramp of the information super highway.

Talk about your controversial stance! It’s like my own Attorney General, Dick Blumenthal, bragging about “taking on the tobacco companies,” as if that was somehow a risky thing to do.

And here’s how Joe spins his vote to go to war in Iraq:

As a longtime member of the Foreign Relations Committee, Senator Biden knows that no foreign policy may be sustained without the informed consent of the American people. And of all the mistakes the Bush Administration made in Iraq, perhaps the biggest was they never leveled with the American people.

If Senator Joe honestly believes Bush’s “biggest” mistake of the war in Iraq was that Bush “never leveled with the American people,” rather than, for example, “they never planned for how they'd run Iraq after the war,” then he is even less insightful than I imagined from his Wal-Mart diatribe.

But with Biden, as with most Senators, whatever their party, the issue is not intellectual honesty. The issue is “What can I do to get elected to something bigger?” And since Biden is one of those poor souls—whose ranks include Chris Dodd, Mark Warner, John Kerry and John Edwards—who believes he stands an actual chance to become the Democratic Presidential nominee over Hillary, then he is going to do stupid, short-sighted stuff like castigate the country’s largest private employer.

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. This commentary in no way constitutes a solicitation of business or investment advice. It is intended solely for the entertainment of the reader, and the author.

9 comments:

I enjoyed your criticism of Fightin Joe, particuarly the Wal-Mart points. However, I had one disagreement. I believ Al Gore will be the next Democratic nominee, even if he doesnt even know it yet. He is the one guy from either party that can camapaign on a platform that is not polarizing - global warming. As you pointed our previously, the subject has hit a tipping point and he certainly has the high ground. Once the Hilary Haters come out in force, it will be Al's to lose.

A) Recently, Wal-Mart capitulated to allow unionization of employees in China (I am not making that up - see the Washington Post article by Allen Cheng and Lee Spears dated 08-10-2006) by the All-China Federation of Trade Unions. Could the SEIU here in the US be far behind (just wondering, and I could be wrong)?

B) Joe Biden will not win the 2008 Democratic nomination for president. Personally, I think Wesley Clark will get the nod based on being an outsider of the beltway, plus he doesn't have the "baggage" that Biden does. BTW, if Hilary gets the nod, she'll lose in the general election (although I could be mistaken).

(1) I love these "let's castigate politicians for being politicians"editorials. Come on.

(2) The comparisons between Biden's job creation skills and Wal-Mart's are completely facile and irrelevant -- so no one who has created less jobs than Wal-Mart can challenge their business practices? Really? Is Matthews suggesting that Biden should devote his time as a Senatorto creating government jobs? My guess is that Matthews isn't aproponent of "Big Government."

(3) Speaking of irrelevant, why does he feel the need to take not one, but two shots at Biden for lifting a couple of lines from a Neil Kinnock speech 18 years ago? Does that somehow lessen the legitimacy of his arguments pertaining to Wal-Mart?

(4) This Matthews guy's trying to pull of a bait-and-switch. Biden'staking them to task for the treatment of their employees, but Matthews responds not by telling us how well Wal-Mart treats their employees, but by how well Wal-Mart's done as a business. Surely he's not suggesting the two are one in the same. (That fella Rockefeller's businesses did pretty well, but I don't think he won any awards for the treatment of his employees). And let's not act like the fact that they pay their employees "double minimum wage" is some sort of act of munificence on their part. Wal-Mart's paying their employees what they have to pay them, and not a cent more (not that there's anything wrong with that).

I think you're pretty much right on. But I have to take issue with this:

"Having met Sam Walton and toured any number of Wal-Mart stores with senior Wal-Mart managers and junior Wal-Mart managers and just plain Wal-Mart associates made rich through "Mister Sam's" generous stock grants over the years, I have a hard time believing people with that kind of strong, proud culture will throw in its lot with the work-rules crowd."

I'll forgive you for not knowing much about American history, and I don't want to get into it in too much detail here, but let me just say this: for as long as organized labor has been around, the strongest, proudest culture that has existed among American working men and women has been rooted in the unions. Unless you're a member of the hereditary aristocracy, unions are a big part of the reason that you've attained any success you've had in your life, for they laid the groundwork that's allowed working class people in this country to move themselves and their children into the middle classes. Literally every policy that's ever helped the American worker--the five-day week, worker's compensation, workplace safety, you name it--has been the product of tooth-and-nail fighting by unions. As far as I can tell, the problem with our economy now is too little unionization, not too much, and I hope that WalMart's workers succeed in unionizing. WalMart has been repeatedly penalized by various courts and governmental bodies here and in Canada for illegal anti-union practices; if it's really true that you don't care if WalMart employees unionize, I'm sure that you'll agree that WalMart should stop breaking the law and allow its "strong, proud culture" to stand on its own.